NetEase Games has officially shut down Nagoshi Studio, the development team founded by Yakuza series creator Toshiro Nagoshi. A notice published in Japan’s government gazette, Kanpo, confirms that the studio was dissolved by shareholders’ resolution on October 31.

Nagoshi Studio was established in November 2021 after Nagoshi left Sega, where he had helped shape the Yakuza franchise into one of its most recognizable modern series. The studio’s first announced game was Gang of Dragon, an action-adventure title set in Kabukicho, Tokyo’s famous nightlife district.

According to a Bloomberg report from earlier this year, NetEase cut funding after learning that Gang of Dragon would require at least another 7 billion yen—about $44.4 million—to complete development. That shortfall appears to have been central to the studio’s collapse.

The news marks another difficult moment for the games industry, where even high-profile studios led by veteran creators are not immune to rising development costs and shifting publisher priorities.

Gang of Dragon was first revealed at The Game Awards 2025, with its gritty Tokyo setting and crime-focused premise drawing immediate comparisons to Nagoshi’s earlier work. The game had not yet received a release date, and NetEase has not confirmed whether development will continue elsewhere or whether the project has been canceled outright.

For now, the closure leaves the future of Gang of Dragon uncertain. It also ends a short but high-profile chapter for Nagoshi Studio, which had been viewed as a major new home for one of Japan’s most influential game directors.